Police Officers Detained in ‘House Sister’ Hukou Scandal

China has detained seven people, including four police officers, for allegedly helping a woman obtain multiple identities that allowed her to purchase 41 properties in Beijing.

The scandal, which has earned the ire of many in China, underscores the nation’s obsession with buying property and has focused a spotlight on growing public frustration with the country’s household registration, or hukou, system.

The detained individuals are suspected of aiding Gong Ai’ai, a former deputy head of Rural Commercial Bank in Shenmu county in Shaanxi province, in obtaining fake household registration records, the Ministry of Public Security said in a statement posted to its website on Wednesday (in Chinese).

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The 49-year old Gong, nicknamed “house sister” by Chinese Internet users after the scam was uncovered earlier this month, allegedly owns properties worth an estimated 1 billion yuan ($161 million), according to Procuratorial Daily, a paper run by the Supreme People’s Procuratorate, the country’s top body for investigation and prosecution.

State-run CCTV reported Thursday that Beijing police had found Ms. Gong was the owner of 41 properties in the capital, covering a floor area of 9,666.6 square meters, as well as an Audi. The police has confiscated 10 of the properties, which include commercial and residential units, and the car, CCTV said.

Ms. Gong purchased properties going by the names of Gong Ai’ai and Gong Xianxia, the Procuratorial Daily said, adding that on top of her first registration in Shenmu county, she had another three identities registered in neighbouring Shanxi province and Beijing between 2004 and 2008. Her fake identity was first uncovered in January 2012, the paper said, citing other local media reports and preliminary results from the investigation.

Li Youbing and Bai Wenkui, police officers from Shanxi Province, were among those detained in connection with the ongoing investigation, the official Xinhua News Agency said. The two other police officers are from Beijing’s Fangshan district and in Shenmu county, the ministry of Public Security said.

News of the detentions met with approval on social media sites on Thursday.

“This is the real reason why housing prices in Beijing can’t come down. You find and eliminate them one by one,” wrote a user of Sina Corp.’s Weibo microblogging service.

In recent years, 121 police officers have been punished in connection to hukou fraud, said the Ministry of Public Security in its statement, adding that it had stepped up supervision of the household registration system and pledging to correct fake and duplicated records.

The Ministry of Public Security didn’t respond to requests for comment, and Gong Ai’ai and the police officers weren’t reacheable.

The hukou system, implemented in the Mao era, has fueled resentment as it bars rural migrants from gaining full status as urban residents. An urban hukou is necessary to secure access to services like public education and health care, and is used to restrict housing purchases. China’s government vowed to “speed up” household registration reform in December, though some analysts are skeptical that reform will come soon, citing fears among officials that any relaxation in the rules might lead to rural residents to flood into cities and strain urban finances.

Housing prices and speculative property purchases are also politically sensitive topics in China, and policymakers have since 2010 implemented cooling measures to curb runaway prices so that ordinary people can get their hand on the first rung of the housing market.

There has also been an intensified crackdown on corruption in China in recent months, as the country’s new leaders face increasing public pressure to step up its governance and impose harsh punishment on officials caught with their hands in the till.

“What’s alarming about this is the depth of bad debt from corruption, which hinders reform and the vitality of an economic system,” wrote Luo Changping, a well-known Weibo commentator. “In addition, the concept of fairness in the political sphere is also eroded, so where can one get sustainability?”

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